nibble around the edges and talk about getting 10% more people insured or changing malpractice rules but health care will still be expensive.

I posted the following earlier today in response to Hoosguy's post about the ideal system but I had missed the boat on that conversation. Here it is again:

I think much of the reason health care is expensive is lack of true competition. Much of this is the result of opaque pricing and preferred or exclusive agreements with insurance companies or the government.

My approach would be to mandate that all providers and insurance companies charge the same rate for the same product, however they want to define that product, and that price must be readily accessible to the public. Walking into a hospital should be as simple as walking into a fast food joint. (I would like one appendectomy and two nights in the hospital please. Of course more complex procedures would be like calling a mechanic with ifs, ands and buts, but I should be able to get an estimate for a heart transplant) If I call the hospital and ask how much an MRI for my arm costs they must tell me. If it depends the length of my arm that's fine, but everybody with an arm of the same length gets the same price. If the doc wants a contrast agent added the same thing applies. The rate for all insurance companies, Medicare and self pay would all be the same.

All providers must accept payment from all insurance companies. All insurance companies and providers must use the same medical codes to make this as easy as cash. When an insurance company gets a bill or sends a check both sides know exactly what it is for. "Reasonable and customary" would be easy to find out, anybody charging more than that would be pressured by market forces to lower prices. If R&C is defined as, say, a 60 percentile price then as the relatively high cost places reduced prices to be competitive the value of R&C drops and forces others to reduce prices. With my transparent pricing I don't doubt that this would occur. Heck, we can mandate price lists be posted on the internet.

What happens to pricing of procedures by providers if insurance companies pay no more than reasonable and customary but will send the patient a check for half of the savings if they have a procedure done at less than reasonable and customary? That incentive can only be up to the deductible amount to avoid any perverse incentives but I imagine a system of transparent pricing and real incentives to consumers to save insurance company dollars would show up in big price drops.

Similarly for insurance. There would be no group rate or any other preferred pricing. A company can price on age, weight, tobacco use, etc, but two people with the same characteristics always pay the same. They would be free to offer coverage for whatever they wanted, whatever deductible and copays, etc.

Employers would be free to purchase insurance for employees but with no more group pricing this would be nothing more than a paperwork convenience, or employees could take a check for the subsidy amount and shop around for their own. If employees shop for and find a plan cheaper than the employer subsidy they can keep the difference.

I would even be ok with government defining a limited number of plans as long as there was a truly broad range. This way there is no argument about what is covered or not, what is an experimental procedure, etc. But if I want a plan that covers only major medical and no office visits, no physical, no OB/GYN care, and has a $50,000 deductible I should be able to buy it. Make me show I have 50k in liquid assets, but let me buy the plan I want.

Real transparency, real choices, real incentives to consumers would bring provider and insurance prices down.